4 steps to prevent a remodel gone wrong

Highlights

• Proper research before the work begins can pay off big later.
• Raising concerns quickly and documenting complaints can prevent problems.
• Mediation, arbitration and lawsuits can be used as a last resort.

With the real estate market in the doldrums, many remodeling contractors are trying to drum up business by offering discounts to homeowners. But that remodel "bargain" could turn into an expensive headache if the newly installed kitchen cabinets are crooked or the basement contractor disappears after the deposit check has been cashed.

"I see a lot of homeowners who are eager to get to the end result of a finished product, but they're not as eager to do the proper preplanning and prescreening of contractors, says Monica Higgins, founder of Renovation Planners, a Los Angeles-based certified construction management firm.

"The reality is, with remodeling jobs, you need to go through a thorough process in order to get to a satisfying finish," she says. "Too many homeowners are hiring contractors for jobs, and they're finding the work doesn't meet their expectations."

1. Research before the job starts

"Don't just call a few people and decide which one you like best," Higgins says. "You may need to interview 10 companies or more to come up with the list of three contractors you'd feel comfortable working with."

Once you have your potential contractors, ask them hard questions, Higgins says.

"Many homeowners have a tendency to only ask a remodeler if they're licensed and how much they charge," she says. "Those are important things to know, but there are so many more questions that should be answered."

Higgins suggests doing a little research to find out if the contractor has ever filed for bankruptcy under any company name, past or present.

"Also, ask how long have they been in business, and if they've worked in your community before," she says. "If the contractor has worked in your neighborhood previously, they'll probably want to protect their local reputation and do a good job."

Check out the contractors' references and examine their recent work, Higgins says.

"Look at their current works in progress, and if possible, look at work the contractor did five to 10 years ago to see how the job held up," she says.

Another way to prevent problems down the road is to make sure the contractor knows your expectations. Many times, the homeowner is dissatisfied because the finished work wasn't what they envisioned, Higgins says.

"Ask the contractor if they can create computer-generated pictures to help you understand what the finished product will be," she says. "It's easier to make changes to a digital model than to the actual construction."

When you're ready to select your top choice, check with your state license board to verify that the company and its workers are properly licensed.

Also ask the contractor to provide proof of adequate insurance, says attorney Joe Cavasinni, chair of Reminger Co., L.P.A.'s Construction Liability Practice Group in Cleveland. Adequate insurance for contractors includes two types of coverage: general liability insurance, which protects against injury or damage done by the company; and worker's compensation, which protects workers from injury on your property, Cavasinni says. These policies don't protect against poor workmanship, but can offer protection -- both for the company and the homeowner -- if a major problem arises.

"It's not uncommon to find that some contractors who don't fulfill their contract will go out of business before the homeowner can pursue their complaint," Cavasinni says. "Then, they resurface a few months later under a different name."

With a proper policy in place, the homeowner could pursue a claim through the contractor's insurer instead of trying to hunt down that company, he says.